Well, hello there PhoolishPhilip!
Nice to meet you. I haven’t seen you much around these parts, which I found somewhat surprising with your 1,000-post big red star and all. But then I checked and saw this is your first-ever Saul’s post. Thanks for stopping by!
I figured someone who posts that much must share some great info, so I took a peek at your history to see what I might learn. After filtering out the 60% or so of your posts which are basically cranky trolling (which oddly enough includes numerous references to Saul’s even though you don’t post here), it looks like value investing and maybe some mechanical screening is your game. Good for you on finding a style that fits your temperament and goals. I sincerely hope it’s been successful for you. But while you’re here, I hope you don’t mind some feedback on this line you wrote about Saul’s on another board:
The risk of permanent and catastrophic loss from being so highly concentrated in what I would consider to be a momentum strategy is just too great for my taste.
If you really do feel this way – and it would seem so since your history includes multiple versions of this thought – I can understand your dilemma. However, with this being a discussion board and all I was hoping I might present a slightly different interpretation to possibly ease your mind.
The risk of permanent and catastrophic loss from being so highly concentrated…
Well, duh. Of course there’s risk. These are young hypergrowth companies after all. But everyone here understands that. With thousands of members and tens of thousands of posts, I’ve yet to see one detailing a portfolio going to zero using this style. In fairness maybe I just missed it mixed in with the literally thousands of posts from people who seem quite happy with their results. Did you see one somewhere you might be able to link? Thanks in advance.
…in what I would consider to be a momentum strategy…
You might call it a momentum strategy, and many do. However, others might call it strict adherence to a policy of only holding companies meeting an insanely high set of performance and execution standards. I’ll be the first to admit it sometimes seems like the only thing harder than clearing that bar is staying above it for any extended period. Every once in a while, an Alteryx or an Okta or a CrowdStrike spends a considerable amount of time among the best of the best. Unfortunately, other firms come and go in a much shorter time frame. Yet while the companies appear to change quite frequently, the standards remain remarkably stable. I personally consider that a highly disciplined strategy rather than momentum, but that’s just me.
…is just too great for my taste.
Ahh, maybe that’s the crux of the matter. But that’s OK. This style definitely isn’t for everyone. The good thing for you is I can’t think of anyone here who would recommend hypergrowth investing if it doesn’t fit your taste. In fact, it’s strongly discouraged. In some of your non-trolling posts I caught a lot of references to “ROI” and “margin of safety”. While I understand those concepts, I must say continually stepping over those darned-risky dollars to pick up those sure-thing nickels just doesn’t fit my taste at all. But I certainly won’t hold that against you or make a personal attack or suggest hypergrowth might fit you better if you only had a little more, uhhh, intestinal fortitude. That would be totally counterproductive.
Investing’s never been a zero-sum game, and the prevailing spirit here has always been everyone needs to find their own way to play it.
I expect this post to be promptly deleted,
As it probably should. Garbage in, garbage out after all.